Besides the insurance handling fee, what other insurance-related costs must a Face Foundrie franchisee reimburse?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to Franchisor's other rights under the law and this Agreement, in the event Franchisee fails to obtain or maintain insurance coverage required under this Agreement and Franchisor obtains the insurance coverage on Franchisee's behalf, Franchisor reserves the right to charge Franchisee its thencurrent insurance handling fee, which is in addition to the cost of insurance premiums, for which Franchisee must also reimburse Franchisor.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, if a franchisee fails to obtain or maintain the required insurance coverage, Face Foundrie can obtain the insurance on the franchisee's behalf. In this case, the franchisee must reimburse Face Foundrie for the cost of the insurance premiums, in addition to Face Foundrie's then-current insurance handling fee.
This means that franchisees need to ensure they maintain the required insurance coverage to avoid these additional costs. Failing to do so could result in unexpected expenses, impacting the profitability of the Face Foundrie franchise.
It is common practice in franchising for franchisors to mandate specific insurance coverage to protect the brand and the network. Franchisees are typically responsible for securing and paying for this coverage. The added cost of premiums and handling fees if the franchisor has to step in underscores the importance of compliance with the insurance requirements outlined in the franchise agreement.